Wells Fargo Downtown Property Sale Finalized

An Iowa-based holding company has purchased four downtown Wells Fargo buildings in a deal that closed late Thursday and in what one broker described as the largest non-industrial property transactions in the metro’s history.

DMCRE1 purchased the Skyview building at 800 Walnut St., the Northstar building at 801 Walnut St., the Towers building at 206 Eighth St., and the Founders Building at 207 Ninth St., from Wells Fargo. The financial institution moved much of its downtown workforce to its Jordan Creek campus in West Des Moines in 2023.

Another entity, DMCRE2, a collaborative real estate team, is also involved in the transaction.

The deal also includes the acquisition of the 545,000-square-foot, 1,600-stall parking garage at 800 Mulberry St. Also included in the sale is a 1.8-acre surface parking lot at 80 Eighth St. and a 3.27-acre surface lot at 900 Vine St.

In all, more than 1.4 million square feet was involved in the transaction, which from a size perspective is among the largest in the metro’s history, said Justin Lossner, senior managing director at JLL, which worked on the deal.

Gordon Glade, a partner in DMCRE1 that is headquartered in Grand Island, Neb., said he and his associates like the growth that’s happening in Des Moines, citing that as a major factor in the group’s decision to buy the properties.

“We really like the downtown Des Moines area and what’s going on there,” Glade told the Business Record. “There’s a lot of transformation and people moving in.”

Glade declined to reveal the purchase price of the properties. The purchase price will become public when it is recorded by the county.

Wells Fargo announced in January 2023 that it was relocating most of its downtown workers to the company’s Jordan Creek campus in West Des Moines. Several weeks later, Wells Fargo listed its downtown properties for sale. Since then, there has been much speculation about the buildings’  future and what their sale and possible redevelopment could mean for downtown Des Moines and the region.

Wells Fargo has been shedding properties nationally for the past couple of years. It has sold properties in West Des Moines and Clive and did not renew its naming rights deal on the downtown arena now known as Casey’s Center.

Paul Cookson, communications director for Wells Fargo in Charlotte, N.C., wrote in an email that the company declined to comment.

Wells Fargo’s relocation of its employees from downtown to the western metro came at a time when hybrid work, layoffs and rising interest rates made it difficult to fill vacant office space in the Central Business District.

Of the four buildings, only the nine-floor Skyview is available to be resold, Glade said.

The 326,495-square-foot building was built in 2002, and has an assessed value of $5.75 million, according to the Polk County assessor’s website.

Glade said the building could be leased to another office user or sold.

He believes it provides high-level office space that is attractive as companies see more employees return to the office.

“The atrium space on top of Skyview is a very unique view of the city, and has a good feeling that we feel is needed in Des Moines,” Glade said. The building also features a theater.

Events will likely be scheduled for this fall to showcase the building to the community and prospective companies or developers, Glade said.

He also said the parking lots would be redeveloped, saying it could be multifamily and mixed-use.

“There’s good opportunities for development along MLK and studies have shown us good traffic and then you start adding what the next five to 10 years look like for that part of Des Moines,” Glade said. “It’s a good area for development to be in.

“You have the soccer stadium project that’s kicking off across the street, down a little bit on MLK, you have quite a bit of development on the other side of MLK, so those things are intriguing to use for future development,” he said. “It’s kind of a nice triangulation between what’s going on with the soccer stadium, the baseball park and the river redistricting that’s going on.”

The 11-story, 188,000-square-foot Towers building was built in 1988. It has an assessed value of $975,000, and could be converted into a hotel with a rooftop restaurant, according to a pre-application document filed with the city of Des Moines.

The three-story, nearly 54,000-square-foot Founders Building has an assessed value of $1.1 million. It was built in 1910, and could be converted into meeting and office space with a wellness center and spa, and ground-level parking, the documents, filed in April, show.

Glade said a data center that was built for Wells Fargo in the Founders Building could be recommissioned as part of the redevelopment plan.

“We know the group that built that data center for Wells [and] there’s a recommissioning plan that looks very favorable,” he said.

Wells Fargo, which has kept some of its employees in the Northstar Building, will maintain its presence in the 10-story, 298,000-square-foot building, which has an assessed value of nearly $36.7 million, the assessor’s website shows.

Carrie Kruse, Des Moines’ economic development administrator, wrote in an email Friday that beyond the documents filed in April for the Towers and Founders buildings, no additional materials or plans have been filed for the other properties.

Chris Diebel, owner of downtown restaurant Bubba, 200 10th St., said he’s excited about the redevelopment being considered for the former Wells Fargo buildings.

“While demand for nights and weekends has increased since the pandemic, daytime business remains slow,” Diebel wrote in an email. “Remote work and flex hours continue to plague downtown restaurants. Anything that will drive daytime and mid-week demand is welcome, especially in western Gateway.”

Diebel wrote that hotels are a great addition because they attract mid-week business travelers who tend to dine out for most of their meals.

“Having a robust mix of residential, commercial, office and retail ensures a successful downtown ecosystem,” he said. “That balance has been off-kilter for the last five years. Hopefully, we’ll continue to see the neighborhood heal as projects like this come online.”

Glade said his group is realistic about the projects it undertakes.

“I wouldn’t say we’re grand vision people,” he said. “It’s finding good businesses and investing in them. Real estate is a business in and of itself, and when you get into office space, this has the unique ability to have development.

“The office [sector] for us has been beat up in certain areas for the last few years,” Glade said. “We like the trend of people moving away from the Chicagos and St. Louises of the world. You look at the foot growth trends of Des Moines and trends in Iowa, where do you want to raise a family and bring your employees to have a good quality of life? If there’s an empty building in Chicago, there’s a lot of them and we’re not investing there because we don’t see the next five- to 10-year trend of population growth and business growth that we see in Des Moines or in Omaha.”